AMSTERDAM–(BUSINESS WIRE)–#insurance–AM Best has assigned a Financial Strength Rating of A- (Excellent) and a Long-Term Issuer Credit Rating of “a-” (Excellent) to Ørsted Insurance A/S (ORIAS) (Denmark). The outlook assigned to these Credit Ratings (ratings) is stable.
The ratings reflect ORIAS’ balance sheet strength, which AM Best assesses as very strong, as well as its adequate operating performance, neutral business profile and appropriate enterprise risk management (ERM).
ORIAS is the captive commercial property insurer for Ørsted A/S (Ørsted), a global sustainable energy group headquartered in Denmark.
ORIAS’ very strong balance sheet strength assessment is underpinned by its risk-adjusted capitalisation, as measured by Best’s Capital Adequacy Ratio (BCAR), which is significantly above the strongest level. The company also benefits from a very conservative and liquid investment portfolio. Offsetting factors in the assessment include the company’s high dependence on reinsurance, although the risks associated with this dependence are partly mitigated by ORIAS’ longstanding relationship with its reinsurance panel, which is highly rated.
The adequate operating performance assessment reflects the company’s track record of good but volatile underwriting results. The captive has reported underwriting profits, net of reinsurance, in four of the past five years, benefiting from low claims frequency. In 2020, ORIAS reported a net loss of DKK 28.8 million (2019: DKK 14.7 million profit). The loss was driven by prudent reserving for three large claims, which have since been adjusted down significantly. Prospective performance is subject to volatility from the company’s potential exposure to large property losses, but underwriting volatility is moderated on a net basis by the captive’s comprehensive reinsurance programme.
As a captive monoline insurer providing commercial property insurance covers for Ørsted, ORIAS’ underwriting portfolio is concentrated in commercial property insurance but is well-diversified geographically. ORIAS’ neutral business profile assessment also reflects its strategic importance to Ørsted.
AM Best remains the leading rating agency of alternative risk transfer entities, with more than 200 such vehicles rated throughout the world. For current Best’s Credit Ratings and independent data on the captive and alternative risk transfer insurance market, please visit www.ambest.com/captive.
This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.
AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
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